Is the counter-proposal that if some part of any company commits fraud, the company should be shut down, everyone who works there should become unemployed, and anyone who depends on company’s product should go without?

To me it seems more reasonable to set the penalties at a level that’s high enough to deter violations. To make that calculation, the main inputs should be how much money they can make from the violation and how likely they are to get caught. Other profits the company made that weren’t from fraud are irrelevant. (or in this case, losses, since we are discussing an unprofitable company)